I'm not quite sure where did you get those number but I don't think your statistics were right may I ask where did you get those information but if those were right i think those 1% are probably full time traders or probably whales.
The numbers are from the collection of research papers which I noted above (see below also for your reference) - you can google them (because when I posted links to them my message was removed by moderators  ) The North American Securities Administration Association (1999): Report of the Day Trading Group
Barber, Lee, Odean (2010): Do Day Traders Rationally Learn About Their Ability?
Odean (1998): Volume, volatility, price, and profit when all traders are above average
Barber, & Odean (2000): Trading is hazardous to your wealth: The common stock investment performance of individual investors
Kumar: Who Gambles In The Stock Market?
Barber, Odean (2001): Boys will be boys: Gender, overconfidence, and common stock investment
Calvet, L. E., Campbell, J., & Sodini P. (2009). Fight or flight? Portfolio rebalancing by individual investors.
Barber, B. M., Lee, Y., Liu, Y., & Odean, T. (2009). Just how much do individual investors lose by trading?
Gao, X., & Lin, T. (2011). Do individual investors trade stocks as gambling? Evidence from repeated natural experiments
As for full-time traders and whales you can check the earlier discussion where I explained that it's very weak reason - those people are also humans like both of us, and lose as much as regular people. It's just happens to be that we hear only about success stories, not about failures so much - survivorship bias. |
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Yeah this is what I know. Retail traders gradually became whale traders at one time. Because the retail traders who can make a profit from market, they make a profit by using their knowledge in the right way. So it is conceivable that these traders can guess at a much deeper market move, so they can take advantage and they express themselves as successful traders.
Yes, but not all, right? Again, I believe knowledge and skills can be learned by anyone any time with the current internet penetration, google, etc. I saw even some people learning trading from TikTok but having those skills, knowledge, experience, etc. Never guarantees that you will be in top 1%. |
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Always i worried about bitcoin when i trade btc to usd. Another i don't worried bitcoin i try to only growth satoshi alt coin buy sell.
Aren't you worried with altcoins more about price risk? There it's well possible for price to quickly collapse if you don't know the actual situation when you enter in position. |
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Honestly "fake rich" has been a thing before crypto as well, it could be part of it nowadays but that doesn't mean there was a problem with fake-rich people after crypto neither, nor there is a problem with crypto.
So, I would have to say just like how tesla wasn't made to look like you are rich, it was build because it was electric and it would be a lot more helpful for the world instead of using basically oil in the end, so all I can say is the fact that people are looking at bitcoin differently and they could promote how "rich" they are with it if they want to, but when they fail to actually spend that kind of money, it will turn out that they are not rich at all and their whole ruse will come to an end, don't know how long they can continue with it but they totally can.
Yes, I totally agree. Different times, different instruments, but the human nature stays the same. ... when they fail to actually spend that kind of money, it will turn out that they are not rich at all and their whole ruse will come to an end, don't know how long they can continue with it but they totally can.
This was exactly my point. It's about how smart you utilize the means to move from "wanna be rich" to "actual rich". But eventually for the "actual rich", nor iPhone, nor Tesla, nor Bitcoin currently are not the final destinations once they reach the "actual rich" (of course there are exceptions). Maybe it will change over time, but not right now I believe. |
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If you buy me a ticket plus all accommodation to China or Hong Kong, I will go there I personally and we as the team will make sure you come to China & Hong Kong for a trip, once as.exchange hits $1M daily trading volume you can screenshot this and save, and BitcoinTalk members will be the witnesses of this promise  I guess that is happening in many countries, not just in China or Hong Kong because people do not think about bitcoin or other new things around them. Having bitcoin really means for me, and I don't care if they are rich than me because I have my life, and as long as I can feel enough for my life, that will be good for me.
So you mean that you treat BTC like some super-rich tread pieces of art, right? They also buy it for the sake of personal belief and pleasure, yet if they profit from it - they are happy, if not - not a big deal in the end. |
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Are you for real, what do have say about institutional investors who have invest heavily on bitcoin? They believe in bitcoin and its revolutionary concepts, they don't want to depend and hope on centralized system that's why they have their share of wealth and investment into Bitcoin and altcoins.
Take it or leave it, Bitcoin is just as good as messiah who gave many individuals an opportunity to show the world the less previlage their power of decentralization to wealth.
Many of today top reach people started earlier, that's why they have been at the top and don't want to step down. $3k to $19k is super amazing as investment than keep money on fixed deposits with shit profits.
Well you mentioned several parts, so I will answer part by part  1) Institutional investors is not a good benchmark, because you can check what happened with LTCM, Lehman Brothers, and many many other bankrupt funds 2) They don't invest in asset because they believe in it. They think they can profit from it and that's all. Yes, some people might believe, but very few of them will direct institutional money simply because they believe in it 3) They say they believe - doesn't mean they do. It can simply be market manipulation - check the history of BTC before when GS said it's gonna go up, and their subsidiary in EU was selling all clients' BTC, and after that market crashed 4) The above points refer to the "Greater Fool Theory" - buy it if you believe there will be fools who will buy from you later @ higher prices 5) If you believe $3k to $19k is amazing, what you can say about the following?: - Novavax $NVAX +3030% - Nio $NIO +1030% - Arcturus $ARCT +1025% - Overstock $OSTK +765% - Fiverr $FVRR +760% - Moderna $MRNA +728% - Plug Power $PLUG +700% - Celsius $CELH +682% - Seres $MCRB +660% - Tesla $TSLA +650% - Bitcoin $BTC +182% over same period 6) If you believe Bitcoin will change your life / global economy, then you should believe also that e-cars will do so, vaccine by Moderna will do so, etc. etc. People will always try to show off wealth and try to "fake it 'til you make it" has been around for a long time. I wouldn't say that Bitcoin is especially popular for this purpose, because it is hard to show off a "piece of code" compared to a loan spent to buy a flashy car or the latest piece of fashionable clothes that they can show around town. Either way it is better to ignore such trivial displays of wealth and concentrate on improving your own life.
You are absolutely correct. I didn't mean that BTC is made for showing off and making someone "fake rich", the point was maybe it became so popular, because it gave hope to those who are "wanna be rich". Of course not 100% only because of this, but I think it could have played on this global trend? Go ahead if you think Bitcoin is for fake rich, but for me Bitcoin can make my finances even more. In fact, I can buy some items
from the profit I made from Bitcoin, so Bitcoin gives me real wealth. In fact I am also sure that there are many people who have
the same opinion as me, therefore many people are competing to collect as much Bitcoin as possible. Because they believe the wealth
that Bitcoin will give is real.
Yet if Bitcoin is for "old elite rich" why do you sell it to cash out? Just keep holding BTC forever, but you eventually exit (maybe partially or completely - doesn't matter) to fix your profit in the "real rich" measure - USD / gold / real estate / stocks / consumables. That is your final goal, rather than collect BTC and sit on it... It depends from how you interpret this matter, Bitcoin is an opportunities to those who understand it well, while for some it's just a fake wealth maybe becaus of volatility and it's behavior that it can go down within the glimpse of an eye. By following you with your sentement, it helps you in your financial state so it's useful.
Yeah right, better to focus with your life on how to improve it than to care about things that won't help you, conserve your energy and focus to whatever you think that beneficial to you.
Yes, mostly agree with you. It's about how you personally perceive it and use it. But the end point for those who are "wanna be rich" is still having USD account even after profiting from BTC. USD / gold / EUR / estate / etc. is the end destination to be rich for most of those people, isn't it? So if you look at it from another side - BTC is a transmission tool to uplift your (not you personally, but overall ) social class. Again, like with those with iPhone, Tesla, case in China/HK, etc. - they use those tools to uplift social class and not seam too poor, so they can eventually get to know more rich people, get more opportunities, and eventually hope to transit to "old elites". It has been a blessing to a lot of gold bug didn’t listen to those non sense stock market create real value story, and these gold bugs hodl their gold like a religions through the entire market cycle, and their reward is so sweet, they watch their value goes up which is re best rewards ever it doesn’t need a lot of fancy praising and attention given to them on the social network, they enjoy the reward alone and on he dark so they’re extremely aware of social event which sound very fake to them just some wannabe rich who get a lot of wealth suddenly and making a lot of noise to impress some fast women fast car and fast house. We are the gold bugs, watching all the blue chip mega rich, spending money like a drug addict over the past decade and turn their once very famous very perceived rich to a dumpster red chip that the companies eventually goes burst and get boot off the bourse.
Yeah yeah the perceived “real rich” business owner very famous on the social network very political influential very high smv very successful, just over ten year they turn from having everything to have long nothing but a bloke, such a “real rich” to be ironically.
Too bad, the gold bugs are too very smart they had know ahead of time all this so called perceived “real rich” and their little cat and mouse game, they decide to not play this stupid game of the “real rich”, they do not crave for attention, they do not crave the recognition, they do not need to tell everybody they’re rich all over the place, the only thing they care most about is looking their numbers goes up, it’s very frugal, very real, very inspiring, and very encouraging number to them, their life is totally out of the social norms, they don’t need those noise to tell them they’re really the greatest person on be earth.
You depicted the current system and historical trend very sadly, yet very correctly. It's also about how you view it. We can blame socio-economic system to be rotten and bad, others can take advantage of it. Same is happening with cryptos and any other area. You are always "in" and use it / benefit from it, or "out" and can blame it for being unfair or bad. Same will be with Bitcoin after 50 years - new generations will likely blame all of us and forum members for being explotive manipulators who took control to the extend we could during the early days of Bitcoin and crypto currencies. |
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It's not really difficult to know who they are, a portion of those traders are whales, people that can move the market on their own and that can perform moves that the average person cannot do, others are simply lucky and despite their lack of knowledge they have obtained profits simply out of luck, and the remaining group consists of the few traders that actually take the time to understand the markets and think about it and that develop a strategy that gives them profits over the long term and then follow that strategy no matter what.
You also reefer to basically 3 things: 1) luck which we cannot control (even international banks can get unlucky), 2) skills & experience which can be learned, 3) initial capital - which doesn't mean anything actually. Like with Takashi Kotegawa who started with $13,600 and ended up with $1.65 million in 4 years (4Y CAGR 232%), and $153 millions 4 more years later (4Y CAGR 210%), having 8Y CAGR of 221%. The guy didn't start as a whale, nor he read anything different from what we all can just google and read too. Profitability will depend on how you do deal with the market and just make it sure that you would make yourself included into those profitable side.
Yes, but how do you decide which side will be profitable? Again - experience & knowledge I think cannot be the only factor here, since it's ready available to anyone around the world. In my opinion, the 1% traders that remain profitable are traders who are passionate about trading crypto, who always learn from their previous mistake, control their emotions, never panic sell, have a reasonable stop loss strategy, never follow hype and know how to select good coins.
Isn't that also about skills & experience which can be learned by you, me, or anyone else reading this? Besides, it's not only about crypto trading, but trading overall - equities, FX, crypto, derivatives, just anything. I understand this part.
Why? It becomes boring as time goes by.
Even if you are making profits, you start to wonder if that is it. Are you stuck with that routine?
This is also the reason why I don't do it every day. I felt it before and I am still feeling it now just 1 hour looking at the movements in one exchange.
I really envy those who can still continue up until now. That means they really love what they are doing.
Yes, loving what you do and being able to monetize it is probably the best thing in anyone's life. Yet, as those above researches have shown - some people continue trading for many many many years, but never earn anything They do love what they do, they do accumulate years of experience, they do learn a lot of things, but... still cannot earn anything. |
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That is really interesting.
Do you have a link or study to backup these numbers?
From where did you take these statistics? I wouldn't say that only 1% of traders make money but without doubt, the actual number shouldn't be higher than 10 percent. Some people like me would say that trading is unprofitable, at least any statistics would prove that only a small percentage of traders actually make profit but on another hand, remember that if someone profits, it's because you lose! So, in this case it means that trading is very, very profitable if you belong to those number of people who profit from it because a lot of people lose a lot of money and a small number of people get them.
Pretty good statistics and data sharing are reported. Although the rate of traders who earned a net profit margin in the long-term period is too low for me, I do not think that this ratio will be too high under any circumstances.
Guys who have been asking for sources. I did post links to several research papers but it was removed by moderator. I assume it's not allowed here, so I will post just the references to research papers - feel free to google them all you can find them all. The North American Securities Administration Association (1999): Report of the Day Trading Group
Barber, Lee, Odean (2010): Do Day Traders Rationally Learn About Their Ability?
Odean (1998): Volume, volatility, price, and profit when all traders are above average
Barber, & Odean (2000): Trading is hazardous to your wealth: The common stock investment performance of individual investors
Kumar: Who Gambles In The Stock Market?
Barber, Odean (2001): Boys will be boys: Gender, overconfidence, and common stock investment
Calvet, L. E., Campbell, J., & Sodini P. (2009). Fight or flight? Portfolio rebalancing by individual investors.
Barber, B. M., Lee, Y., Liu, Y., & Odean, T. (2009). Just how much do individual investors lose by trading?
Gao, X., & Lin, T. (2011). Do individual investors trade stocks as gambling? Evidence from repeated natural experimentsbut on another hand, remember that if someone profits, it's because you lose! So, in this case it means that trading is very, very profitable if you belong to those number of people who profit from it because a lot of people lose a lot of money and a small number of people get them.
You might be missing that most of the times you lose to the exchange, not necessarily to other traders. Especially with the ones who allow you to use high leverage and always liquidate you (sometimes by manipulating price). That's not really same with "trading success". If risk and money management were simple, they wouldn't be losing money. They lose money because they have problems, including risk and money management. It is extremely difficult, it is extremely difficult to balance it all. Not just in the long run. Because many strategies with risk and money management just break down at a distance.
Yes, for sure those are not simple, but they can be taught, right? Just a simple ratio of expected TP-to-SL of 3-to-1 would save a lot of people, but of course there are way more advanced methods. Still even the ones who mastered it, don't necessarily earn profits (with consideration of all fees, taxes, inflation, real rates, etc.) Everything that you have listed makes only a theoretician out of a trader, not a practice. What's the use of these other people's books, research, when you have neither statistics nor experience?
People lose money because they think they read it, watch it, connect a couple of instruments and that's it, the path to victory. The path to victory will be only in the case of a large and long accumulation of statistics and refinement of the strategy based on historical data, analysis of all your trades, which should be at least 1000. And the one who finds the ideal pattern in all these actions will earn money.
The fact that you read all the books in the world of trading will not make you a trader even by 5%
True and no I think. You can skip most ( not all) the hard-way learning path by learning from others what works and what doesn't, what worked before and what won't in the future. Just like with basics - yes, you can directly deposit $100 and start learning and after a year personally find out that there's head & shoulders pattern, there's overconfidence bias, etc. Or you can read it, learn it, see it, and you already skipped that 1 year of practice. On the other hand, in response to your question, it is possible to say that patient investors who perform technical and fundamental analysis in a correct, successful and definite way include that percentage. Of course, there will be traders who will win without any detailed analysis, although rarely, but I don't think the number of such people will exceed the number of fingers of a hand. That is why the answer to your question will be the traders who make accurate technical-fundamental analysis succinctly.
I don't think its about technical & fundamental analysis (I don't refer to pure crypto trading, but trading overall). Based on the proven EMH (Efficient Market Hypothesis) - technical analysis will not work, fundamental analysis might work but very very rarely under specific market circumstances. I don't know who the 1% successful traders mean...
everyone ever profits and losses in trading but there is a hidden group *maybe whales which are compact selling when it must to selling and buying when it must to buying. *maybe the whale's group which is 1% successful in the trade
Maybe. However, there are many traders who are experienced enough to get an idea of the next movement in the market. And I think they are also the 1% traders who can earn by trading. Whale traders dominate the market and make a profit through their huge funds. And the retailer who makes a profit from the market earns by trading using his knowledge. So according to those small experienced traders are also among these 1% successful traders. Also possible, but if that is the case - knowledge can be learned. So the retail trader would accumulate enough knowledge and become a whale him/her/self. Thus others seeing that would repeat that many times and in large enough sample data, there will be too many whales who are continually earning good profits systematically (!) and persistently (!). But that's not the case at all... One among many other examples is LTCM ( https://en.wikipedia.org/wiki/Long-Term_Capital_Management) - they got most money at a time, most talented people, they were definitely the whales but... That 1% might possibly be the whales who holds big volume enough for the to manipulate the price. People can really profit from trading since the track is just based on human behaviour. And behaviour can easily be studied since there is pattern that can be used to determine the next price.
Becoming good on trading takes a lot of experience, a lot of loss because experience is costly. Doing trading for longer period of time means you have finally get the whole idea of trading, but because along the way there is a big lost happening only those who can sustain remain.
Then here you refer to initial capital which you can waste on learning path. Then why wouldn't you start with $100 initial cap, and trade $0.01 deal sizes? Like this you get 10,000 chances to see how good you mastered trading. |
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Dear everyone, we published the first short promo video https://youtu.be/LlAF6tX-3tgVery happy to hear your feedback, recommendations and comments! |
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If we look at things in general, then it really is that way, and it has always been that way - because in order for the rich to be rich, the others must be poor. All my life I have heard that 10% of people in the world control 90% of everything that exists, and 90% of people fight for the remaining 10%. Since the poor constitute the majority, it is their fault that they do not change the system and allow everyone to live a dignified life.
Yes, I also think so as you noted above. Pretending is ultimately just pretending after all, you can’t be part of the elite just if you own the latest smartphone or if you sell a kidney or some other body part to buy a car driven by the elite. Being part of the elite means having an almost inexhaustible source of money which ultimately distinguishes them from what we call ordinary people.
The real question is actually who are these people who want to portray themselves as fake rich people? I personally would never want to (even if I could) stand shoulder to shoulder with most of these people who make up today’s elite.
With this point I would disagree. You can be part of the elite with just the latest smartphone or rented things. Check here the latest story: https://www.whatsonweibo.com/the-fake-rich-of-shanghai-peeking-inside-a-wannabe-socialite-wechat-group/It's about girls in Shanghai who pretended to be rich, to get rich husbands (thus joining the elites eventually). There are similar things in Russia (not so organised though ), and I guess in many other places. That's why people say "fake it till u make it". People who want to portray themselves as being rich, while not actually being ones - mostly hungry for money, greedy, or just simple people who don't see other ways of improving their lives. Just with regular social / life pressure - people are stimulated to show success and rewarded for doing so (YouTubers, Instagramers, TikTokers, etc.), and eventually some of them do turn out to become actually rich and go to buy houses, cars, some shops, restaurants, etc. I hope you are not one of those who are waiting for the end of the world at any moment, because if some kind of global apocalypse happens there will not be much difference between whether you have great wealth, or you are as poor as a church mouse - of course if you don't believe the rich have a solution to their salvation - something like what was shown in the 2012 movie. It is never wise to keep all the eggs in the same basket, I think that is also true when it comes to BTC.
Don't worry I am definitely not waiting for the apocalypse. And while the elites might have some "Plans Z" for such case, with the end of the world, as you said correctly - it's unlikely there's anything what can save anyone. The “fake rich” paradigm in the context of Bitcoin is completely wrong in my opinion, because anyone can be rich if they own something valuable. A man who owns gold is rich until that gold loses its value or someone steals it - he who owns shares in a company is also rich if the company is successful - but he can lose everything overnight because of a scandal in which that company finds itself.
Bitcoin, as far as we know, came in response to this perverted and rotten financial system that currently exists, and has given people the opportunity to try to be as independent as possible from that system. Bitcoin is for some much more than money, freedom has never had a price.
Very agree with the first part, but haven't some assets had proven historically that they are here for a very long time? With Bitcoin - we just need to wait and see how it goes in the next 100-1000 years just like we saw with gold. Bitcoin indeed can heal the current rotten financial system, or it can get crashed when someone thinks "that's enough" and then again the old elites just continue with their own old pace and things get back to where they were (or probably get worse). |
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How can you say this words if you think that bitcoin is just a fiction then you should educate your self try to do more research for more about bitcoin and never ever compare anything into liquid materials comparing bitcoin into Iphones? Bitcoin is per to per and it can be use anywhere and now can be use as payment method to those restaurant who uses it. How about those billionaires who already invested in bitcoin? They put their trust into bitcoin to make more profit then they should be faking it too? is that what you meant? People nowadays are luck on educational it is better to do your own research mate just sayin.
We invested in BTC back in 2016, while knew about it from even earlier. Thus believe me education about what is Bitcoin, it's tech side, economic side, investment side, and all others - is there For the point about BTC can be used as a payment method - well I already wrote about that above. As for billionaires who recently invested: 1) have you actually checked their wallet personally to know it's true? 2) you registered in BitcoinTalk since 2016, thus I assume you do know from the history what usually happens soon afterwards such claims by such people / banks / funds / etc. are publicly made. And again, neither I, neither anyone us here is against Bitcoin or cryptocurrencies at all. Just check what is happening in the world, economy, society, how marketing works, and you eventually will notice the (possible) trends. To make it clear, even if you do own a lots bitcoin and you still don't know anything about this project in my on idea you own nothing. Because by owning a piece of named private key and saving it under carpet you won't be rich you should do your own research and know what is the bitcoin. Imagine someone who don't know difference between gold and metal owning 90k of gold what is the point if he doesn't know what is it and how to use it? Knowledge is wealth and power.
That's very deep and good point though. But those lambo boys got their cars because they made profit from the buying BTC cheap, not because they bought BTC when it was 15,000 USD so they bought Lambo with BTC tags in order to brag. When I see people around me that are buying bitcoin, I see none of those that are buying it for a status symbol. They even hide how much they have.
People often buy iPhone with the money they don't have have in order to impress, but I don't know how would you brag with few thousands of dollars worth bitcoin, and who would even be impressed with that.
So no, I don't think that bitcoin is for the "fake rich".
Well of course they got the car cuz they sold their BTC. But eventually if BTC is really so-so-so good (from their perspective), why they didn't keep it till it reaches $1M/1 BTC? Or they just played the "greater fool theory" pretty well at a time when it permitted? For sure people won't buy BTC to show off that they have 1-2 BTC, but they will buy it because it will give them access to the status of "rich" as they believe (which could be just "fake rich"?). Just like in the daily life there's a phone (some old Nokia for poor (no offence for anyone) vs. latest Verty for super rich vs. latest iPhone for "fake rich"), there's a car (some old Ford model for poor vs. latest Bugatti / Rolls Royce for super rich vs. Tesla for "fake rich"), and there are assets (lottery tickets for poor vs. direct PE/VC/infrastructure investments for super rich vs. ... ) Still it's just thinking out loud - no claims here or assured statements, as some of the people here noted - value of wealth, and how you measure it - relative thing which will change with time and with each own individual preferences. |
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How I see that is both institutional and retail traders / investors usually have: 1) luck: you cannot control it2) skills (incl. strategies, etc.): you can learn it easily or hire someone who already got this skill3) insights: usually illegal, but can make you super richand 4) instrumentsWith all the tech-hype, people might have misunderstood that "tech instruments" (fancier charts, AI, neural networks, prediction models, automatic SL/TP & risk management, etc.) will help them with profitability... Yet, I think ( doesn't mean true or correct, that's why we are having discussion ), it's about "financial instruments". That can imply access to the top VC deal directly (you as regular person cannot get in), ability to trade various types of swaps (you cannot also mostly), ability to invest in RSAs (revenue sharing agreements) / infrastructure projects (hard to default, provide stable and ultra-long term return), exotic derivatives, different types of structured products, and many many others. All those fancy software can be googled and bought fairly quickly, but for financial instruments - you just cannot |
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If you think this way, then any trading is gambling, because you can never be sure of the development of events, but you can analyze, protect yourself from manipulation and distribute the balance wisely. And this all applies to both the spot market and the derivatives market. It’s just that many people go into margin trading with a minimum of money and maximum leverage. It is clear that with such a disproportionate percentage of risk and profit, when the former is several times greater than the latter, people lose money. In general, I very often hear about the fact that any margin trading is a casino and you will definitely be liquidated. Of course, if you use the leverage slider around the 50 leverage  But as a rule, the problems of margin traders are the same as those of spot traders: they are unbalanced risk and money management, a strategy that has not been worked out to the smallest detail, and, of course, psychology. If all this is put in order, then the trader, in general, does not matter where to trade, on the spot or on the margin market. He will feel good everywhere. I also agree with you. Yet with psychology & strategy & money management - there are many books, researches on this and now softwares that help with that. But people still keep loosing |
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I believe that the percentage of successful traders in the long term is more than 1%, ~ 5%. In the long term, very few strategies have the right to exist. In the short term, the number of successful traders is much larger, especially in the interval of 3-6 months, sometimes their strategies bring big X's, but in the long term they cannot maintain profitability due to psychology and loss of concentration, in my opinion. Who is this 5% in the long term? Well, if we discard all market makers, traders from hedge funds or banks, and take into account only retail traders, then these are the traders who have balanced risk management and money management close to the ideal. Although there is no limit to perfection. Well yes, in short-term the number can be very large, but thats not representative of actual situation. I think there was a study also that had proven that a monkey (literally) can trade better than Wall Street trader, sometimes even outperforming him. But I doubt you would call a monkey to be a successful trader To be in that 1.6% a trader needs to have persistent positive stable, net of all fees and expenses, returns. Risk management + money management is fairly simple and nowadays can be well automated, but even those people loose money. And hedge funds and instituions also actually - not all of them is able to earn decent returns (when they earn). 1.6% of the winning traders are whales and whale followers. Yes, im not kidding, this is true of any financial market. That is why there is a very good saying in the financial markets, that the more money people have, the richer they are. Margin trading, Futures, BO are all gambling; The market and rich institutions are the bookmakers so your chances of winning are very low. - I just want to tell the truth and hope the new traders here must be very focused when trading and never be subjective. Getting rich by trading is a long project and you have to sacrifice a lot to become professional. Trust me guys I don't really agree with all. Yes, you said correctly that the more money you have - the more money you can make (not always though, look at Lehman Brothers among others), and those whales, etc. as I showed above actually underperformed retail traders. Margin, futures, options, structured products, derivatives - actually very good source of alpha. I personally know people who got very rich by trading options. Yet not too many people can really understand behind the simple "call is a right to buy asset in the future". There are so much more into that. That's why there's less competition in that area I guess. As for long-term in trading - very right. Can never get rich overnight with anything. |
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The reason why a lot of trades come short in the long run is because a lot of them think crypto is just a means to get rich quick and are impatient to see their plans and trades play out.
But I do agree with this point - the main reason why so many people eventually lose. We always refer to the whales or big boys who have millions of dollars to spend in the market in order to manipulate and influence how the market moves at their will, but that isn't always the reason for people who can't make profits, it is more about intelligence and strategy to predict the market.
Whoever can survive and last longer in the trading battlefield obviously have a great methodology and strategy to achieve the goal.
The question is what do 1,6% of traders do differently?
Yes, I totally agree. So what in your opinion makes those 1.6% different? - it can be either institutionals or retail traders like everyone here. The top 1% are those who don't trade at all IMHO. These traders trade when it is required - when the markets are going to make a move which is so big that it can make a huge difference when happened. These traders are from the big names who trade to make profits 'only' of any range.
Lol, yeah good point - as there was a quote in Chinese, about you don't need to join a battle to win - wait and see how your enemies kill each other and themselves This is why many says trading is not profitable at all, well I guess based on the numbers its all about the risk and of course the skills of the traders. Looking at the long term time frame, if you still losing big money then trading is not for you or you just need to improve yourself and learn more. Traders must also know delayed gratification and don’t just think that you’ll get rich easily on this market.
But skills can be learned, aren't they? I know that many people are too stupid or too lazy to actually sit and learn something, but I think it's greater than 1.6% of those who actually learned / mastered the skill, but still keep losing? For sure these numbers are really pertaining with Forex/Stocks trading since this crypto market is just a decade year old then we cant really say that only 1% is making profits
on this entire market.We might not have those precise percentage but for sure it would be more than 1% because if we do saw that there are only a few been making profits
in long run then we wont really be seeing much of liquidity.Just try to observe the entire market when it comes to moving price or volume then its hard to believe on such
claims.For forex then i might believe but for this market? No, i would really be more than that..
What you refer to is the small sample of history for cryptos. And you might be correct with the current market - it's too new, too small, thus too many arbitrage opportunities (like few years ago even some technical analysis would make you decent money - like with stocks many years ago). But once you increase the sample, more people enter the market, more people try new / old strategies - the numbers will average themselves to 1-2% same with other markets, be it FOREX, stocks or other assets. People in trading just come and go, there will be newcomers or old traders who survive in the crypto trading industry. I don't know who are those in 1% but probably they are those people who are willing to risk and spend more time in trading. In trading failed, not all become successful, if there's a winner there could be a loser and that's how trading will work.
It might be the reason that there are always new beginners in trading that hoping they will earn money and thought that it is easy to trade and gain profit. But the fact, that isn't, it is required skills and strategies before you will become a successful trader and probably those who failed can't able to survive and the choose quitting than to survive.
Yeah valid point also, but just "keep trying and you will succeed" might not be very feasible for everyone due to personal capital limitations. I believe if you have $1m ready to go wasted, and you keep trying with $100 only, eventually you will master the skill (if it's about that). But those who succeed rarely waste so much money on just trial-and-error experiments. There must bee some other factor? These are the most experienced traders. They have a different source of income that helps them to sustain their trades. I'm not one of them but how I wish that I can be part of that very small percentage that managed to continue trading all of their lives.
As a holder, I only trade when it's the right time, and probably this 1% have done day trading before to master the market for a long time. And after that, they've chosen to manage and become stable through holding certain stocks and cryptos that they rely on someday.
You refer to market timing strategies - they are well documented also and well researched. No need to invent new things there, just study quant approaches to market timing and you will get what you aim for with "right entry" points. But that's also not for everyone I guess, and not that sustainable. Once every guy around the corner knows how to time the market based on advanced strategies, - it will stop working. Probably people who have successful or profitable trading strategies. Better to develop or use something that works consistently for you. If you find a strategy that works for you most time , you automatically become part of the few successful traders. I think they are few people who are consistently profitable in trading but am not really sure about the percentage
Once you find the amazing winning strategy - there's short period of time you have to make money, because advanced funds track inconsistencies and other funds, and can analyze what you do differently and quickly replicate your strategy. So eventually this strategy will be known to everyone and will stop making money. they were definitely extraordinary people. It is even possible that a token maker or a person who is able to launch his own token is able to make all long-term tax payments in his trading. And I feel that maybe I'm not included in that part because I'm still a very beginner in trading.
That's the common misconception about traders. We are all special and extraordinary in own ways. What can be done by one human - can be done by another human also with enough patience, time and efforts. I believe it's not just about skills or being extraordinary. |
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I don't really know who these top 1% traders are but in my opinion, these should be a collection of the whales and the crypto investment funds (venture capital funds). I just assumed this up before these guys can make so much by just executing 2-3 trades monthly and if they do it right, they end up with good amounts of profits due to the fact that they use a truckload of funds to trade compared to the average trader who is just started out with $200 - $1000.
The reason why a lot of trades come short in the long run is because a lot of them think crypto is just a means to get rich quick and are impatient to see their plans and trades play out.
Not at all actually. All the big guys and whales are just regular humans like all of us - in fact recently they OUTPERFORM the common retain traders You can see the data below:   |
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Truth stop limit will not work the same as you like to use it many people use it and think they will save their trade for more losing streak . Many traders lost a lot because of this function, due to its very volatile price it is easier to hit your stop limit than your price target. volatility is the main problem of Bitcoin and that's why it's not good suggestions to always have this option it can easily break your stop limit many times . Risk management and good entry is the best option to enter in the market with low leverage if your in the future trading .
Yes, that's why with actual trading strategies and risk management techniques there's no sustainable method of getting rid of price risk. Those will just try to make sure that " on average" you don't lose all your money. But average is just all valued divided by N, and you never know if the next value will become so extremely negative, that it will destroy all your previous small positive values, yet still on average keeping you with modest positive returns. They do offer the old-fashioned and traditional products but what's more interesting is the fact that the amount of liquidations happening every now and then are extremely higher as compared to what we see in forex and commodity derivative markets. I'm happy with what's already being provided but will definitely love to see something new rolling in so the old things get a competition. About price risk, how is it not pleasant to see our BTC's "price growth"? When the value of our BTC will remain the exact same in BTC since we hold it, it doesn't make any difference.
Yes, you made very good point about liquidations. The reason behind that is simple. First, it's at the core of those exchanges' business model - to get you liquidated (most of the times it will happen) - then it's exchange's earnings, and you just lost everything. I saw a lot of exchanges that survive entirely on this "liquidate all" model (sometimes manipulating numbers also - to get you liquidated). Of course not everyone is like that, but the majority is. Second, with FOREX and commodities - they are more regulated, people entering there overall are moree educated (by % of total capital in FOREX + commodity vs. crypto) thus they know more about what they are doing. And those people actually try to invest, as opposed many newcomers in crypto who know nothing about leverage or Bitcoin, but heard in the news that Bitcoin always goes up, and see leverage of 100x and think "Im gonna become next Bill Gates tomorrow with this". Once crypto truly becomes mainstream (I believe it will eventually) the trend for liquidations will somewhat balance for FOREX, commodities and crypto. As for the new products, I would really appreciate your, and other's opinion about this, where we describe a new type of financial product (new not only for crypto, but for any other market you can imagine; not advertisement, but truly appreciate all your comments and opinion on this): https://bitcointalk.org/index.php?topic=5299655.msg55829101#msg55829101And yes, when BTC price keeps growing - everyone is happy (apart for shorters of BTC ), but once it reverses (and you never know when it will start - maybe after few minutes you check the price) - then here comes the downside which most of the people didn't bother to / didn't know how to protect. And the value of BTC is very unlikely to stay same - back in 2018 you could buy 1 apartment in Russia (and even in Moscow), apart from other cities. Then in 2019 - you couldn't buy even half. Now you can buy part of it probably - that's the issue with price risk. |
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With $1M it's good to diversify among top20 cryptos, some real estate, risk-free bonds (with positive yield), basket of currencies, gold, several VC investments, and of course equities (growth/value/dividends). And of course hedge whatever risks possible (not 100% though, as that would mean 0% return) with derivatives or counter trades. Then can double that $1M fairly quickly and safely.
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I think it is very bad to say that Bitcoin is "Fake Rich". Even though maybe you yourself also store Bitcoin and like it. Could it be that these are just words to scare, in order to buy as much Bitcoin as possible. But what I know is that Bitcoin is amazing, it has proven to be able to last for a long time even since 10 years ago. So of course it can be said that Bitcoin as a real asset of wealth is not just a fake.
I didn't made any claim, but rather shared potential historical analogy, and happy to hear everyone's opinion here. |
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